Newmarket Capital, a Registered Investment Adviser, recently closed its first investment deal for the Battery Finance loan strategy. This strategy allows borrowers to use bitcoin as collateral for long-term financing. On November 7, 2024, Newmarket Capital completed a refinancing deal for the Bank Street Court apartment in Philadelphia, with a loan secured by both the building and around 20 bitcoin.
The Battery Finance strategy lets borrowers use bitcoin as 10-30% of their loan collateral alongside traditional assets. They partnered with Ten 31 to establish Battery Finance, a majority-owned subsidiary that uses bitcoin in financing structures. Unlike other lending companies that let clients borrow against bitcoin with a risk of liquidation if the bitcoin’s price falls below a certain threshold, Newmarket Capital removes this risk by offering loan structures without a mark-to-market trigger.
The Battery Finance strategy can be structured differently depending on the borrower’s needs. In some cases, borrowers can use bitcoin they already hold as collateral for a loan, while in other cases, Newmarket Capital and the borrower purchase bitcoin as part of the loan’s structure. The latter is how the loan for the Bank Street Court building was structured.
The loan carries a single-digit interest rate and has a maturity of 10 years. Newmarket Capital CEO Andrew Hohns sees broad applicability for this lending structure, including financing a house or automobile with bitcoin. Battery Finance is currently focused on working with borrowers interested in acquiring or refinancing commercial properties.
This tool is designed for asset owners who want to re-denominate some of their equity in their existing portfolio into bitcoin and Bitcoiners who want to obtain stable long-term financing supported in part by their bitcoin to acquire assets in the real world. In time, Battery Finance plans to service a broader range of customers.
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